Ensign Group(US:ENSG)2025-04-29 20:03Operations and Facilities - As of March 31, 2025, the company operates 340 skilled nursing and senior living facilities, with a total of 34,946 operational skilled nursing beds and 3,220 senior living units[146][148]. - During the three months ended March 31, 2025, the company expanded its operations by adding 11 skilled nursing operations and one senior living operation, contributing 1,365 operational skilled nursing beds and 132 operational senior living units[150]. - Subsequent to March 31, 2025, the company added two skilled nursing operations and one senior living operation, resulting in an additional 241 operational skilled nursing beds and 68 operational senior living units[151]. - The company expanded its operations into Alabama, Alaska, and Oregon, adding three skilled nursing operations and one campus operation in the first quarter of 2025[152]. - The company’s operational skilled nursing beds are distributed as follows: 10,682 owned and operated, 687 leased with a purchase option, and 23,577 leased without a purchase option[148]. - The company’s skilled nursing operations are concentrated in Texas (79), California (67), and Arizona (33), which together account for a significant portion of its operational capacity[157]. - The company added 13 new operations during the three months ended March 31, 2025, contributing to overall growth[278]. - The number of facilities at period end grew to 297, a 12.5% increase from 264 in the previous year[306]. Financial Performance - Total revenue for the three months ended March 31, 2025, increased by $162.9 million, or 16.1%, compared to the same period in 2024[276]. - Diluted GAAP earnings per share grew by 15.1%, from $1.19 to $1.37, for the three months ended March 31, 2025[276]. - Skilled services segment income for the three months ended March 31, 2025, was $143,931,000, up from $126,809,000 in 2024[281]. - Adjusted EBITDA for the three months ended March 31, 2025, was $137,385,000, compared to $115,675,000 in 2024[281]. - Net income for the three months ended March 31, 2025, was $80,353 thousand, compared to $68,960 thousand in 2024, representing a growth of 16.5%[301]. - Adjusted EBITDA increased to $137,385 thousand, up from $115,675 thousand, marking an 18.7% increase year-over-year[301]. - Total expenses as a percentage of total revenue decreased from 91.9% in 2024 to 91.4% in 2025[281]. - Revenue generated by Transitioning Facilities increased by $14.8 million, or 8.8%, primarily due to improved occupancy and skilled mix[313]. Revenue Sources - Total service revenue for the skilled services segment reached $1,123.6 million in Q1 2025, up from $969.6 million in Q1 2024, representing a year-over-year increase of approximately 15.9%[168]. - Medicaid revenue for skilled services increased to $443.4 million in Q1 2025 from $382.1 million in Q1 2024, accounting for 39.5% of skilled services revenue[168]. - Medicare revenue for skilled services rose to $287.8 million in Q1 2025, compared to $265.6 million in Q1 2024, representing a growth of approximately 8.4%[168]. - Skilled services revenue reached $1,123,554 thousand, up from $969,602 thousand, reflecting a 15.9% increase[306]. - Skilled revenue as a percentage of total skilled nursing routine revenue at 71.3% in Q1 2025[168]. Occupancy and Patient Metrics - The occupancy percentage based on operational beds improved to 81.9% in Q1 2025, compared to 80.1% in Q1 2024, with operational beds increasing from 31,169 to 34,946[165]. - The company reported a total of 2,538,135 actual patient days in Q1 2025, an increase from 2,255,531 in Q1 2024, reflecting a growth in patient occupancy[165]. - For the three months ended March 31, 2025, the skilled mix for patient days increased to 31.4% from 31.0% in 2024, while the skilled mix for revenue rose to 50.2% from 49.9%[163]. - Same Facilities occupancy increased by 2.9% to 82.6% during the three months ended March 31, 2025, indicating market share growth[276]. - Transitioning Facilities occupancy rose by 5.0% to 83.5% compared to the same period in 2024, reflecting organic growth from acquired operations[276]. Regulatory Environment - The company is subject to extensive regulatory changes that may impact revenue and operational costs, with ongoing scrutiny from federal and state agencies[170]. - The Ownership Transparency Final Rule requires skilled nursing facilities to disclose additional ownership information, effective November 2024, which may affect compliance and operational practices[174]. - The Staffing Rule issued by CMS establishes minimum staffing standards for skilled nursing facilities, with phased implementation over the next several years[184]. - The SNF Quality Reporting Program (SNF QRP) includes standardized patient assessment data elements, with penalties for non-compliance resulting in a 2.0% reduction in payment rates[191]. - The SNF PPS FY 2025 Final Rule results in a net 4.2% increase in SNF payments under Medicare Part A for fiscal year 2025, based on a 3.0% market basket increase and adjustments[199]. - The Improving Care and Access to Nurses Act (I CAN Act) was introduced to expand the role of nurse practitioners in skilled nursing facilities, potentially increasing access to care[178]. - The California Department of Health Care Access and Information approved a statewide healthcare spending target of 3.0%, which will be phased in over time, starting at 3.5% for 2025 and 2026[183]. - The Patient-Driven Payment Model (PDPM) focuses on clinically relevant factors to determine Medicare reimbursement, aiming for a more value-based payment system[189]. Cash Flow and Financing - Cash provided by operating activities increased by $36.9 million for the three months ended March 31, 2025, compared to the same period in 2024, due to improved operational performance and timing of payments[338]. - Cash used in investing activities increased by $209.1 million for the three months ended March 31, 2025, primarily for acquisitions and capital expenditures[339]. - Cash used by financing activities increased by $11.9 million for the three months ended March 31, 2025, primarily due to $10.8 million in share repurchases[341]. - The company maintains a revolving credit facility with Truist Securities with an availability of up to $600.0 million, maturing on April 8, 2027[342]. - The interest rates on the credit facility range from 0.25% to 1.25% per annum based on the Consolidated Total Net Debt to Consolidated EBITDA ratio[342]. - Cash and cash equivalents at the end of the period were $282.7 million for the three months ended March 31, 2025, down from $511.8 million in the same period in 2024[337]. - The company reported a net decrease in cash and cash equivalents of $181.9 million for the three months ended March 31, 2025[337]. Costs and Expenses - Cost of services increased by $123.9 million, or 16.1%, to $891.9 million, with cost of services as a percentage of revenue rising to 79.4%[320]. - General and administrative expenses rose by $5.4 million, or 9.4%, to $62.6 million, primarily due to additional headcount from acquisition activities[325]. - Cash paid for acquisitions was $194.2 million for the three months ended March 31, 2025, compared to $2.9 million for the same period in 2024[330]. - The company has approximately $150.0 million budgeted for renovation projects in 2025[330].